A Record of Outstanding Industrial Performance

A Record of Outstanding Industrial Performance

We’ve beaten the competition in terms of growth in each of our business segments.

We’ve innovated to achieve the lowest-cost position in key businesses.

We’ve created new-to-the-world product categories, such as Corning® Gorilla® Glass, our heavy duty diesel substrates and filters, and our customized fiber-to-the-home solutions; used transformative manufacturing platforms; and built strong, trust-based relationships with the world’s leading customers. That process has served us well not only for the last decade of outstanding industrial performance, but for more than 165 years.

Committed to Growth Through Innovation

Committed to Growth Through Innovation

The primary way we grow is through innovation. Our diverse innovation portfolio includes products at all stages of development to drive both near-term and future growth. Our ability to innovate throughout a product and industry’s life cycle is one of the primary reasons for Corning’s long-term competitive advantage in the markets where we compete.

By innovating continuously, we’re able to capture a significant share of the market, achieve the lowest-cost manufacturing position, gain the trust and loyalty of our customers, and earn a higher share of the industry’s profits. In fact, over the past few years, we’ve generated approximately two-and-a-half times the profit per dollar of revenue versus competitors in our major market segments.

Corning’s products and markets have changed many times over the years, but our innovations share fundamental ingredients: a really tough problem, a combination of materials and process innovation, and a solution that makes a real difference in people’s lives. From Thomas Edison’s light bulbs to the Hubble Telescope to Corning® Gorilla® Glass, this formula has led to more than 165 years of life-changing innovations, and we continue to apply it today.

Diverse Business Segments

Diverse Business Segments

Corning has multiple business segments that are contributing materially to the company’s growth. Display Technologies generates significant revenue, cash flow and profit, while our four other major business segments continue to grow, with particularly strong results demonstrated by Optical Communications.

Delivering Value to Shareholders

Delivering Value to Shareholders

In October 2015, Corning announced a Strategy and Capital Allocation Framework that reflects the company’s financial and operational strengths, as well as its ongoing commitment to capital stewardship.

Recognizing the company’s significant progress across multiple fronts, the Framework was updated in June 2016. Corning now expects to generate and deploy more than $26 billion through 2019, up from the previous plan to deploy more than $22 billion.

The Strategic and Capital Allocation Framework consists of two primary actions:

Return more than $12.5 billion to shareholders through share repurchases and increased dividends. (In June 2016, the lower band of the company’s commitment to shareholder returns was raised to $12.5 billion from $10 billion.) As part of this plan, Corning intends to target an adjusted debt-to-EBITDA ratio of two times, and to reduce its global cash to approximately $2 billion.

Invest approximately $10 billion in Corning’s focused portfolio. Over the next four years, Corning will concentrate its RD&E investment, capital spending, and strategic M&A on a cohesive set of 3 core technologies, 4 manufacturing & engineering platforms, and 5 market-access platforms. Corning, already a leader in these areas, believes its focused-portfolio approach will allow it to generate substantial growth and returns for investors.

Cash Distributions

Cash Distributions

Between October 2015 and September 30, 2016, Corning returned $4.3 billion to shareholders under the Framework, including $3.9 billion in share repurchases.

On July 27, the company launched a $2 billion accelerated share repurchase, which has approximately offset the EPS impact from the loss of Dow Corning silicones earnings.

By year-end 2016, management expects Corning will have returned $6 billion to shareholders, reducing share count by almost a quarter since the Framework was announced last year.

Strategic Transactions

Strategic Transactions

Under the Strategy and Capital Allocation Framework, Corning expects to use strategic transactions to help advance our growth.

In June 2016, Corning acquired Alliance Fiber Optic Products (Nasdaq: AFOP), broadening its access to the high-growth cloud data-center market. The purchase of Alliance Fiber Optic Products follows multiple acquisitions made in 2015 to increase Corning’s strength in Optical Communications. The integration of Samsung Electronics’ optical fiber business will help us capture growth in Asia, while the addition of TR Manufacturing, Inc. increases our market access and enhances our ability to offer comprehensive optical solutions to our enterprise customers. Additionally, the combination of iBwave’s capabilities with Corning Optical Communications’ portfolio of connectivity and global manufacturing reach will enable Corning to extend its position as a leading provider of wireless solutions.

In January, the company announced a joint venture with Saint-Gobain Sekurit to develop, manufacture, and sell lightweight automotive glazing solutions. The joint venture will use innovative Corning® Gorilla® Glass for Automotive in the laminated window solution.

In late 2015, we completed the acquisition of Gerresheimer AG’s pharmaceutical tubing business. As part of the transaction we entered into a 10-year supply agreement with Gerresheimer AG and agreed to form an equity joint venture (75% owned by Corning) to focus on accelerating innovations for pharmaceutical glass packaging.

Realignment of Interest in Dow Corning Corporation

Realignment of Interest in Dow Corning Corporation

In June 2016, Corning completed a strategic realignment of our ownership interest in Dow Corning.

Corning exchanged its 50% interest in Dow Corning for 100% of a subsidiary that holds an equity interest in Hemlock Semiconductor Group, and approximately $4.8 billion in cash.

Dow Chemical Company assumed 100% ownership of Dow Corning.

The $4.8 billion in cash is the equivalent of approximately 30 times the annual equity earnings of Dow Corning’s silicones business, and the freedom to deploy this capital is a tremendous value driver for Corning shareholders. The realignment also was a significant milestone in delivering on Corning’s strategy to focus 80% of the company’s resources on our 3 core technologies, 4 manufacturing & engineering platforms, and 5 market-access platforms.